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  • Curt K. Cowles v. Commissioner of Internal Revenue, 949 F.2d 401, 10th Cir. (1991)

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    The United States Court of Appeals for the Tenth Circuit affirmed the tax court's ruling that Curt Cowles had substantial tax liability for the years 1979 and 1982. The tax court found that transactions Cowles entered into with a partnership had no economic substance and were sham transactions designed only to produce tax deductions. The appellate court agreed that Cowles did not have any legitimate business purpose for investing in the partnership. It also affirmed the tax court's imposition of various penalties against Cowles under sections of the Internal Revenue Code.

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    Filed: 1991-12-04 Precedential Status: Precedential Citations: 949 F.2d 401 Docket: 90-9021

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    The United States Court of Appeals for the Tenth Circuit affirmed the tax court's ruling that Curt Cowles had substantial tax liability for the years 1979 and 1982. The tax court found that transactions Cowles entered into with a partnership had no economic substance and were sham transactions designed only to produce tax deductions. The appellate court agreed that Cowles did not have any legitimate business purpose for investing in the partnership. It also affirmed the tax court's imposition of various penalties against Cowles under sections of the Internal Revenue Code.

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    Curt K. Cowles v. Commissioner of Internal Revenue, 949 F.2d 401, 10th Cir. (1991)

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    The United States Court of Appeals for the Tenth Circuit affirmed the tax court's ruling that Curt Cowles had substantial tax liability for the years 1979 and 1982. The tax court found that transactions Cowles entered into with a partnership had no economic substance and were sham transactions designed only to produce tax deductions. The appellate court agreed that Cowles did not have any legitimate business purpose for investing in the partnership. It also affirmed the tax court's imposition of various penalties against Cowles under sections of the Internal Revenue Code.

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    of 2

    949 F.

    2d 401
    NOTICE: Although citation of unpublished opinions remains unfavored,
    unpublished opinions may now be cited if the opinion has persuasive value on a
    material issue, and a copy is attached to the citing document or, if cited in oral
    argument, copies are furnished to the Court and all parties. See General Order of
    November 29, 1993, suspending 10th Cir. Rule 36.3 until December 31, 1995, or
    further order.

    Curt K. COWLES, Petitioner-Appellant,


    v.
    COMMISSIONER OF INTERNAL REVENUE, RespondentAppellee.
    No. 90-9021.

    United States Court of Appeals, Tenth Circuit.


    Dec. 4, 1991.

    Before JOHN P. MOORE, STEPHEN H. ANDERSON and EBEL,


    Circuit Judges.
    ORDER AND JUDGMENT*
    JOHN P. MOORE, Circuit Judge.

    This is an appeal from the tax court's determination of substantial tax liability
    for the years 1979 and 1982 and imposition of various tax penalties for the year
    1982. The primary issue for our review is whether the transactions entered into
    between Mr. Cowles and the partnership had economic substance or whether
    they were sham transactions designed to produce tax deductions for the
    investor, Mr. Cowles.

    We agree with the tax court's analysis the transactions had no economic
    substance, and it is clear from the record Mr. Cowles could not and did not
    have any realistic, legitimate nontax financial or business purpose for investing
    in the partnership as structured. Therefore, we AFFIRM the tax court's ruling.

    Because we uphold the tax court's decision based on its finding a sham

    transaction, we do not discuss its holding with regard to the Rule-of-78's


    accounting issue. However, we do agree with the tax court on all its rulings.
    Consequently, we also AFFIRM the tax court's imposition of various tax
    penalties under I.R.C. 6661, 6653, and 6621.

    This order and judgment has no precedential value and shall not be cited, or
    used by any court within the Tenth Circuit, except for purposes of establishing
    the doctrines of the law of the case, res judicata, or collateral estoppel. 10th
    Cir.R. 36.3

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